Sri Sishil Kumar More, Siliguri V. DCIT, CIR-2, SILIGURI, Siliguri

ITA 1474/KOL/2012

• Counselvise Citation: [2013] 119 COUNSELVISE.COM (IT) 2920 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2013
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 12-10-2012
• Court: TRIBUNAL
• Department Lawyers: SUSHANTA KR SINHA
• Section: 194C

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B , KOLKATA [ () . .. . . .. . , ,, , , ! ''# $ ''# $ ''# $ ''# $ ] ]] ] [BEFORE HONBLE SRI P.K.BANSAL, AM & HONBLE SRI GEORGE MATHAN, JM] !& !& !& !& /ITA NO.1474/KOL/2012 '( )*/ ASSESSMENT YEAR : 2007-08 ($, / APPELLANT ) - - ( ./$, /RESPONDENT) SHRI SUSHIL KUMAR MORE D.C.I.T. CIRCLE-2, SILIGURI -VERSUS- SILIGURI (PAN: AEKPM 8498 J ) $, 0 1 / FOR THE APPELLANT: SHRI SUNIL SURANA, FCA ./$, 0 1 / FOR THE RESPONDENT: SHRI SUSHANTA KR.SINHA, JCIT, SR.DR 2 3 0 4 /DATE OF HEARING : 11.03.2013 5) 0 4 /DATE OF PRONOUNCEMENT : 11.03.2013 6 / ORDER PER BENCH THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. C.I.T.(A)-SILIGURI IN APPEAL NO.63/CIT(A)/SLG/09-10 DATED 04.07.2012 F OR THE ASSESSMENT YEAR 2007- 08. 2. SHRI SUNIL SURANA, FCA REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI SUSHANTA KR.SINHA, JCIT SR.DR REPRESENTED ON BEHAL F OF THE REVENUE. 3. IN THE ASSESSEES APPEAL THE ASSESSEE HAS RAISE D THE FOLLOWING GROUNDS :- 1. FOR THAT THE ORDER OF THE LD.CIT(A) IS ARBITRAR Y, ILLEGAL AND BAD IN LAW. 2. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF THE FREIGHT PAYMENT OF RS.6,17,010/- U/S 40(A)(IA) WHICH WAS DULY PAID AND NO AMOUNT WAS PAYABLE AS AT THE END OF THE YEAR, THEREFORE THE PROVISIONS OF SECTION 40 (A)(IA) WERE NOT APPLICABLE. 3. FOR THAT THE LD. CIT(A) ERRED IN DISALLOWING THE EXPENSES OF FREIGHT CHARGES AMOUNT OF RS.6,17,010/- FOR VIOLATION OF PROVISION OF SECTION 40(A)(IA) OF THE INCOME TAX ACT 1961 AND HOLDING THAT THE PAYMENT MADE TO TRANSPORTER WHICH WAS FALLEN WITHIN THE PURVIEW OF SECTION 194C OF THE INCOME TAX ACT, 1961. IT A NO.1474/KOL/2012 2 4. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION AMOUNTING TO RS.56,625.00 MADE TO LABOUR CHARGES WHICH WAS UNJUSTIFIED AND WR ONG AND INCURRED FOR BUSINESS PURPOSES ONLY. 5. FOR THAT THE LD. CIT(A) ERRED IN CONSIDERING THE BUSINESS STRATEGY OF THE ASSESSEE AND DISALLOWANCE OF EXPENSES MADE ON TRAVELING, GENERAL AND ADVISORY CHARGES, AMOUNTING TO RS.9,252.00 WHICH WERE TOTALLY MISCONSTRUED BY FACT AND LAW BOTH AND INCURRED FOR BUSINESS PURPOSES ONLY. 6. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION AMOUNTING TO RS.8,312.00 ON TELEPHONE CHARGES WHICH WAS VERY MUCH INTENDED AND INCURRED FOR BUSINESS PURPOSES ONLY. 7. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE ORDER OF THE CIT(A) BE MODIFIED AND THE ASSESSEE BE GIVEN THE RELIEF PRAYED FOR. 8. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GROUND BEFORE OR AT THE TIME OF HEARING. 4. GROUND NO.1 OF THE ASSESSEE IN THE GROUNDS OF A PPEAL IS GENERAL IN NATURE. IN REGARD TO GROUND NOS.2 AND 3 IT WAS SUBMITTED BY TH E LD. AR THAT THE ISSUE WAS AGAINST THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF THE FREIGHT PAYMENT U/S 40(A)(IA) OF THE ACT ON ACCOUNT OF NON DEDUCTIO N OF TDS U/S 194C OF THE ACT. IT WAS THE SUBMISSION OF THE LD. AR THAT THE PROVISION OF SECTION 194C OF THE ACT HAD BEEN AMENDED TO INCLUDE THE CASES OF THE ASSESSEE W HO IS AN INDIVIDUAL ONLY W.E.F. 01.06.2007. IT WAS THE SUBMISSION THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EXPORT OF FOOD GRAINS. IT WAS THE SUBMISSION THAT D URING THE RELEVANT ASSESSMENT YEAR THE ASSESSEE HAD PAID RS.18,32,235/- TOWARDS FREIGH T CHARGES. IT WAS THE SUBMISSION THAT THE AO WAS OF THE VIEW THAT AS THE ASSESSEE HA D NOT DEDUCTED TDS U/S 194C OF THE ACT THE FREIGHT CHARGES WAS LIABLE TO BE DISALLOWED BY INVOKING THE PROVISION OF SECTION 40(A)(IA) OF THE ACT. IT WAS THE SUBMISSION THAT THE ISSUE OF THE APPLICABILITY OF THE AMENDED PROVISION OF SECTION 194C OF THE ACT BE ING EFFECTIVE FROM 01.06.2007 NO DISALLOWANCE CAN BE MADE BY INVOKING THE PROVISION OF SECTION 40(A)(IA) OF THE ACT FOR ASSESSMENT YEAR 2007-08. HE PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DCIT. CIRCLE -34, KOLKATA VS DEVENDRA KR.DUGAR IN ITA NO.1852/KOL/2009 DATED 02.06.2011. IN REPLY THE LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE AO AND THE LD. CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE HAVE ALS O PERUSED THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF D CIT,CIRCLE-34, KOLKATA VS IT A NO.1474/KOL/2012 3 DEVENDRA KR.DUGAR IN ITA NO.1852/KOL/2009 DATED 02. 06.2011 WHEREIN IN PARA-5 IT HAS BEEN HELD AS FOLLOWS :- 5. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD, KEEPING IN VIEW OF THE FACT THAT THE ASSESSEE IS AN INDIVIDUAL AND IN SO FAR AS THE PROVISIONS OF SECTION 194C(1) IS CONCERNED THE AMEN DMENT MADE BY THE FINANCE ACT, 2007 W.E.F. 01.06.2007 STATES THAT SECTION 194C(1) IS APPLICABLE TO THE INDIVIDUAL ASSESSES ONLY FROM 01.06.2007. SINCE THE ASSESSMENT YEAR INVOLVED IN THIS APPEAL IS 2006-07 WE FIND NO INFIRMITY IN THE ORDERS OF THE L D. CIT(A) WHICH IS IN CONFORMITY WITH THE PROVISIONS OF IT ACT. THEREFORE, WE CONFIRM THE SAME AND DISMISS THE REVENUES APPEAL. 5.1. AS IT IS NOTICED THAT THE CO-ORDINATE BENCH OF THIS TRIBUNAL HAS CATEGORICALLY HELD THAT THE ISSUE OF THE AMENDMENT TO SECTION 194 C OF THE ACT HAS TAKEN EFFECT FROM 01.06.2007 BRINGING INTO THE AMBIT INDIVIDUALS, WE ARE OF THE VIEW THAT NO DISALLOWANCE CAN BE MADE IN THE CASE OF ASSESSEE FO R THE RELEVANT ASSESSMENT YEAR AS THE AMENDMENT IS W.E.F. 01.06.2007. IN THE CIRCUMST ANCES, RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DCIT,KOLKATA VS DEVENDRA KR.DUGAR THE ADDITION U/S 40(A)(IA) OF THE ACT AS CONFIRMED BY THE LD. CIT(A) STANDS DELETED. 6. IN REGARD TO GROUND NOS.4, 5 AND 6 IT WAS SUBMIT TED BY THE LD. AR THAT THE ISSUES WERE AGAINST THE ACTION OF THE LD. CIT(A)IN CONFIRM ING THE ADHOC DISALLOWANCES MADE BY THE AO OUT OF LABOUR CHARGES, TRAVELING CHARGES AND TELEPHONE AND FAX EXPENSES. IT WAS THE SUBMISSION THAT THE AO HAD MADE ADHOC D ISALLOWANCES OF 20% HOLDING THAT THE EXPENSES WERE NOT AMENABLE TO VERIFICATION AND ALSO ON ACCOUNT OF POSSIBLE PERSONAL USAGE. IT WAS THE SUBMISSION THAT THE LD. CIT(A) HAD REDUCED THE DISALLOWANCES TO 10%. IT WAS THE SUBMISSION THAT NO ADHOC DISALLOWANCE WAS CALLED FOR AS NO SPECIFIC DEFECT HAS BEEN POINTED OUT. IN REPLY THE LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE AO AND THE LD. CIT(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE AO HAS MADE THE DISALLOWANCE ON ACCOUNT OF EXPENSES NOT BEING AMENABLE FOR VERIFICATION AND IN RESPECT OF T ELEPHONE AND FAX EXPENSES ON ACCOUNT OF POSSIBLE PERSONAL USAGE. EVEN BEFORE THE LD. CIT(A) NO SPECIFIC REASON FOR IT A NO.1474/KOL/2012 4 THE ADDITION HAS BEEN POINTED OUT IN THE REMAND REP ORT CALLED FOR BY THE LD. CIT(A). ADMITTEDLY NO EXPENSES CAN BE DISALLOWED UNLESS SPE CIFIC DEFECT IN THE EXPENSES CAN BE POINTED OUT. JUST BECAUSE A PARTICULAR EXPENDITU RE IS NOT AMENABLE FOR VERIFICATION WOULD NOT GIVE GROUND FOR AN ADHOC DISALLOWANCE SO ALSO UNLESS THE PERSONAL USE IS NOT SHOWN NO ADHOC DISALLOWANCE CAN BE MADE. IN THE CIR CUMSTANCES, WE ARE OF THE VIEW THAT THE ADDITION AS MADE BY THE AO AND AS REDUCED BY THE LD. CIT(A) WITHOUT POINTING OUT ANY SPECIFIC DEFECT IS UNSUSTAINABLE O N THE FACTS AS EMANATING FROM THE ORDERS OF THE LOWER AUTHORITIES. IN THE CIRCUMSTANC ES THE ADHOC DISALLOWANCES STAND DELETED. 8. GROUND NOS. 7 AND 8 OF THE ASSESSEES APPEAL ARE GENERAL IN NATURE WHICH DO NOT CALL FOR ANY ADJUDICATION. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.03.2013. SD/- SD/- [ .., ,, , ] [ .''# $ , ] [P.K.BANSAL] [ GE ORGE MATHAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER ( (( (4 4 4 4) )) ) DATE: 11.03.2013. R.G.(.P.S.) 6 0 .''7 87)9- COPY OF THE ORDER FORWARDED TO: 1. SHRI SUSHIL KUMAR MORE, M.R.ROAD, KHALPARA, SILIGUR I. 2 THE D.C.I.T., CIRCLE-2, SILIGURI. 3 . CIT KOLKATA 4. CIT(A)- SILIGURI 5. DR, KOLKATA BENCHES, KOLKATA /7 .'/ TRUE COPY, 62/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES IT A NO.1474/KOL/2012 5